Finance Minister Margaret Mwanakatwe has warned all State-Owned Enterprise (SOE) against resisting reforms that are necessary to deliver profits to their shareholders.
Speaking on the occasion of the 2nd Industrial Development Corporation’s (IDC) Annual Group Conference in Livingstone, Saturday, Mwanakatwe bemoaned the slow pace at which some SOEs are embracing reforms that were introduced by government to wean them of the Treasury.
She noted that while a few notable SOEs had been declaring dividends to the IDC in the last financial year, others are still resistant towards improving their work and business culture.
Some of the key reforms government has undertaken are that the boards and chief executive officers of SOEs are now appointed by the IDC as opposed to respective Ministers of Finance in a bid to boost professionalism and change of mindset.
“Even as we are seeing gratifying signs, we are concerned that progress is slow. There are still too many companies that have not taken the steps in the right direction. We still have CEOs and Boards who believe government must finance them; we still have CEOs who continue to seek the protection of government rather than take the steps to compete with the private sector; we still have Boards where Directors focus on their own remuneration rather than driving the turnaround of the companies they have been entrusted to lead,” Mwanakatwe said at Avani Hotel.
She warned that government will not tolerate SOEs resistant to reform.
“Let me be very categorical. The reforms we have embarked on to reshape State-Owned Enterprises will not fail. We will not tolerate Boards and CEOs that resist reform. If you are not prepared to be the drivers of reforms, you leave, or we will get rid of you,” Mwanakatwe cautioned.
“The days when CEOs stayed in their jobs through political patronage, paying for workshops in Ministries or the travel of Permanent Secretaries and Ministers must end. CEOs must remain in their jobs because they are implementers of reforms; people who deliver profit and dividend to their shareholders. Board members who attend meetings to get envelopes rather than drive reforms will not survive. Boards are not retirement packages or sources of additional income. We appoint you to Boards to drive reforms, deliver change and ensure the companies are profitable.”
She further complained that the Treasury was tired of supporting failing SOEs.
“Companies that come to the Treasury with begging bowls will not be tolerated. Treasury is tired of supporting entities that instead of contributing to the Treasury, are instead draining the Treasury. If the IDC as your shareholder cannot intervene, don’t come to the Ministry of Finance. If your companies and the IDC cannot find amongst yourselves the solution to your sustainable future, do not come to the Treasury seeking some miracle of sorts,” pleaded Mwanakatwe, who also directed that all SOEs observe the raft of austerity measures introduced by government earlier this year, among other directives.
The 2nd IDC Annual Group Conference was held under the theme: “driving reforms from within.”